Indraprastha Gas Q4: CNG volumes up 3% in FY26

Why IGL’s Q4 volume trends matter

Indraprastha Gas Limited (IGL) remains closely tracked for its exposure to Delhi and NCR mobility and household fuel consumption. The company’s quarterly performance is heavily driven by CNG volumes, supplied to over 12 lakh CNG vehicles across Delhi and NCR, and by the pace of PNG adoption across domestic and commercial consumers. The latest disclosures and commentary highlight two competing forces. On one side, steady CNG additions via vehicle conversions and a growing CNG bus ecosystem support volumes. On the other, the policy push for electric vehicles (EVs) in Delhi introduces uncertainty around future CNG demand, especially in passenger segments.

The data points in the public domain also underline an operational focus on expanding dispensing capacity and sustaining conversion momentum. At the same time, analyst assumptions on future gas allocation and sourcing shifts are becoming central to earnings sensitivity discussions.

CNG volumes: 3% YoY growth and the Q3 FY26 base

In Q3 FY26, IGL’s CNG volumes grew 3% year on year to 637.15 million standard cubic meters. The company’s volume growth has been linked to ongoing conversion of vehicles from petrol and diesel to CNG, and an increasing CNG bus fleet run by Delhi Transport Corporation (DTC) as well as private operators. Management has also pointed to the role of company-fitted CNG variants offered by car manufacturers, which have gained popularity and supported CNG adoption.

IGL’s managing director, Kamal Kishore Chatiwal, highlighted that on October 27 the company clocked its highest-ever sale of 51.92 lakh kg per day. He attributed the rise to festive demand and initiatives to increase dispensing capacity, noting that the company had earlier been around 50 lakh kg, while the last annual run-rate was around 46 to 47 lakh kg. This implies a reported increase of 10 to 12% based on the comparison cited by management.

Another operational indicator shared in the same context was a quarterly MMS CMD volume of around 8.3 versus 8.09 last year, alongside management’s expectation to end the year at 9 MMS CMD.

Vehicle conversions: monthly run-rate and NCR pockets

Vehicle conversion momentum remains a key near-term input for CNG volume stability. Management indicated that car conversions picked up to 17,000 in September, before easing back to around 15,000 in October. The company described the current range as 15,000 to 17,000 conversions per month. It also flagged strong momentum in NCR locations such as Gautam Budh Nagar and Ghaziabad, with conversion growth stated to be in the 25% range.

Beyond retrofits, company-fitted CNG variants introduced by carmakers were cited as a structural driver that can sustain adoption without depending only on aftermarket kit availability.

PNG demand: stronger growth in Q1 FY26 and FY24 domestic trend

While CNG is the headline driver for IGL’s transport exposure, PNG has shown stronger growth in the data cited. PNG volumes grew 11% year on year in Q1 FY26, reflecting higher domestic and commercial PNG consumption. In addition, the company cited a 15.3% growth in PNG domestic sales in FY 2023-24.

These PNG trends matter because they can diversify volume dependence away from transport alone, particularly when policy discussions increasingly focus on electrifying parts of urban mobility.

Delhi EV Policy 2.0: what the reported proposals say

Media reports cited in the provided material indicate that the Delhi EV Policy 2.0 advocates phasing out of CNG autorickshaws and restricting registration of CNG two-wheelers (2W) and four-wheelers (4W). As per those reports:

• Registration of new CNG autorickshaws would be banned from 15 August 2025.
• Existing CNG rickshaws would need to be replaced by electric rickshaws.
• The policy recommends a ban on registration of CNG 2W from 15 August 2025.
• It promotes conversion of buses into e-buses.

The context also notes that the Delhi Transport Department has already started phasing out CNG buses, while the government is encouraging EV passenger cars over CNG passenger cars, consistent with earlier policy direction.

Management view: EV transition risk and the aggregator exposure

Management discussed EV policy risk through the lens of aggregator vehicles. In Delhi, IGL indicated there are around 2 lakh registered vehicles with aggregators, and that the company sells around 10 lakh kg per day into this pool. Based on management’s understanding of an approved policy direction, new additions could move to 100% electric over five years, and by 2030 the aggregator pool could be converted to electric. Management described a five to seven year window and noted that around 40% of IGL’s volume comes from passenger vehicles.

On this basis, management said it expects around 10 lakh volumes by 2030 to be impacted due to the aggregator policy. It also noted that the Delhi government has approved 15-year running for new vehicles purchased by aggregators or taxi operators, as part of recent decisions referenced in the discussion.

CAQM bus entry rule: CNG demand in intercity corridors

Beyond Delhi-only policy, the Commission for Air Quality Management (CAQM) guideline mentioned in the material requires that from November 1, all buses entering Delhi should be only CNG, EV, or BS-6 diesel buses. Management said it has been in discussion with various state transport undertakings (STUs) because Haryana informed that 600 buses have been affected, and Uttarakhand earlier informed that 500 buses have been impacted due to the guideline.

The company’s position, as described, is that while intra-city public transport may shift to electric over time, intercity routes and NCR satellite town operations could remain reliant on CNG. IGL said it is meeting STU leadership and offering solutions related to conversion to CNG.

The material also notes that consistent follow-ups with STUs yielded positive results, with UPSRTC adding 60 new CNG buses in FY 2023-24.

Analyst sensitivities: volume loss case, margins, and gas sourcing

A separate sensitivity analysis in the provided text suggests that if the Delhi EV policy is implemented strictly and CNG volumes from three-wheelers (3Ws) drop to zero, IGL’s total CNG volumes could reduce by only 0.25 mmscmd, estimated at about 2.3% of total FY27E volume. The same analysis suggests this could impact FY27E EBITDA and EPS by 2.5% and 5.8%, respectively.

The base case assumptions referenced include: (i) no new CNG buses and CNG passenger vehicles being registered in the Delhi geographical area (GA) from FY26 onwards, and (ii) APM gas allocation for the CNG segment going to nil by FY28E. Despite these assumptions, the base case expects CNG volume to grow at a CAGR of 10% from 6.6 mmscmd in FY25 to 8.0 mmscmd in FY27E.

On unit profitability, the same set of assumptions points to EBITDA margin rising from around INR 6/scm in FY25 to INR 6.5/scm in FY27E. The material also states an expectation that APM gas allocation for CNG moves from 28% in Q4FY25 to zero by FY28E, with IGL replacing it with RLNG.

Vehicle registration data: Vahan trend cited for Q1 FY26

The material cites Vahan data for IGL’s GAs for Q1 FY26 showing about 17% year-on-year growth in new CNG vehicle registrations to 46,197 vehicles, up from 39,372 in the same period last year. The same note links near-term strength in registrations to CNG’s competitive pricing versus petrol and diesel.

Key facts snapshot

Market impact: what investors are watching into FY27

For FY27, the most important variable highlighted in the material is whether CNG volume growth can sustain above 3% per annum as EV adoption starts to compete with CNG adoption for new vehicles. Another variable mentioned is whether an international Saudi Arabia tender translates into a meaningful new revenue contract, although no contract size or award detail is provided in the text.

Investors also track segment mix risk and policy exposure. The material states that 7.5% of IGL’s total CNG volumes are derived from 3Ws and that 50% comes from the Delhi GA, which frames how much of the portfolio is linked to policy changes in Delhi. On the cost side, the expected decline in APM allocation toward zero by FY28E and replacement with RLNG is a key medium-term driver for margin and earnings sensitivity.

Conclusion: volumes steady, policy risk monitored

The latest set of volume indicators point to modest CNG growth and stronger PNG momentum, with management focusing on dispensing capacity and conversion pipelines. Policy risk from Delhi’s EV push remains a headline issue, but the sensitivity analysis cited in the material suggests limited earnings impact under a strict implementation scenario focused on 3W conversion. The next set of company updates and policy clarifications, including any formal rollout details for EV Policy 2.0 and progress on STU bus conversions under CAQM guidelines, will remain central to how the market frames IGL’s FY27 volume trajectory.